Is it morning in America? Or is now a time for blood, sweat, toil and tears? As the United States warms up for the presidential elections, the choice between those two narratives will be the most important decision each party makes and may determine who wins in 2012.

Both are ways of talking about the economy - the issue that polls show overwhelmingly preoccupies U.S. voters. The morning-in-America storyline is that the financial crisis is over, the economy is healing and the country's innate powers of renewal, reinvention and innovation are already asserting themselves. The blood, sweat, toil and tears view is that the economy is still sick and that it will take a significant, arduous and collective effort to nurse it back to health.

For now, the White House is committed to the morning-in-America narrative. That was the message of a discussion among members of the President's Council on Jobs and Competitiveness that I moderated this week at the New York Forum, an annual gathering of CEOs and politicians that is shaping up to be New York's answer to Davos.

The most influential voice on the panel belonged to Valerie Jarrett, a senior adviser to President Barack Obama. She has worked as a lawyer, chief executive and Chicago City Hall heavyweight. But her most important qualification now is as the confidante and best friend of the Obamas; she has the president's ear - and his back - and she is always on message. "We have good reason to be optimistic," she said. "We have great entrepreneurs and the capacity to reinvent ourselves. This is still the best country on Earth."

The other panelists, all members of the Jobs and Competitiveness Council, faithfully chimed in. Robert Wolf, chairman of UBS Group Americas, and one of Mr. Obama's earliest supporters on Wall Street, agreed, and accused the news media of painting an overly bleak picture of the economy. "Since I sat here a year ago, we have two million jobs that have been created," he said. "Exports have gone up by 10 per cent and technology is booming, agriculture is booming. But when you look at the TV you hear what we are not doing well. I believe we have built a foundation and are on the right path."

There are a lot of good reasons for the White House's determination to say the glass is half full. For one thing, from the very outset, hope has been central to this president's personal brand. Perhaps more importantly, two and a half years after taking office, Mr. Obama owns the U.S. economy. That gives him and his backers a powerful incentive to cast it in the most positive light. And confidence can be a self-fulfilling prophesy.

But the strategy could go very badly wrong if the public doesn't buy it. And so far, people don't. A Rasmussen survey this week found that just 26 per cent of likely voters thought the United States is headed in the right direction; 65 per cent think the country is on the wrong track.

That pessimism is the product of more than just the TV shows Mr. Wolf excoriated: Unemployment still exceeds 9 per cent, and more people than ever told Rasmussen that their homes were worth less than their mortgages. A separate Gallup survey revealed that even people with jobs think now is a bad time to find good work: 86 per cent said that now is a bad time to find a "quality" job. That number jumped to 93 per cent for university graduates. Before the recession, in January of 2007, it was just 47 per cent.

That grim view suggests that Americans may not be in the market for happy talk. We may be at one of those rare historical crossroads when voters realize their country is in trouble and they prefer the leader who offers a bleakly honest diagnosis to the one who says everything is okay. That was the magic of Winston Churchill's famous "blood, toil, tears and sweat" speech.

At the wrong moment, the audacity of hope can sound a lot like denial. Republican front-runner Mitt Romney is already making that point. A Romney campaign video released earlier this month mocks Mr. Obama's assertion that "there are always going to be bumps on the road to recovery," arguing that the 20 million Americans who have lost their jobs can't be dismissed as mere bumps in the road.

So the big question of the next year is this: Do Americans want someone to reassure them they are still great, or someone who admits things are awful?

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